1. Introduction 2. Definitions 2.1 Call Center: Since the 1970s, call centers have traditionally been defined as physical places where calls were received in high volume. This was initially for the purpose of answering customer queries of service industry. There is not much change in recent decade except that many industries are conducting standard services through Call Centers such as banking, insurance, traveling, telecommunication services, airliner, and etc. Also it is broadly used in plenty of business activities such as telesales, telemarketing, and technical support. In these contexts, the call centers entitle organizations to interact with their customers through a telephone from any location in the world with no reference to physical boundaries. Call centers allow organizations to keep their customers in track for business purpose. Apart from traditional functions, call center can make outgoing calls to customers (Shanti N.Tiwari, 2009)1. The call center can be a focal point for most specific business activities of an organization such as answer incoming calls; log calls as well as solicits customers for new sales, donations, conduct customers’ survey etc. According to Shanti (2009), call center can be any of the following:
• • • •

Huge telemarketing centers Fund-raising and collection organization Help desks, both internal and external Outsourcers (better known as service bureaus) that use their large capacity to serve lots of companies

Reservation centers for airlines and hotels Recent globalization has made call center a rapid rate growth industry the in

developing world when worldwide organizations outsourced their call centers to lower-cost regions. This growth reflects aspiration of companies to improve access to their business in


more efficient time period manner to attain satisfied customers (Bird, 1998)2. The development of technologies has forced the companies to restructure the ways they managed relationships with customers. Many industries, such as banking, have been innovatively applying state-of-the-art technology in their customer relationship management through telephone and internet banking. Call centers provide organizations valuable information about the performance of their services (Staples et. al, 2001)3. They allow organizations to understand how customers feet about service performance. (Gilmore, 2001)4 2.2 Service The 21st century is considered as the service industry century. Service industry is growing at a rapid pace across developed and developing countries. There are many definitions of what constitutes service. Services are deeds, processes and performances (Zeithaml and Bitner, 2003)5. Broadly speaking, services include all economic activities whose output is not a physical product or construction is generally consumed at the time it is produced and provides added value in forms (convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns of its first purchaser (Quinn,Baruch and Paquette, 1987).6 Service has been entering every part of life from the most essential demands (such as eating, sleeping) to other entertainment needs (such as sport, traveling, cooking, and telecommunication). In other words, we readily define bank, hotel, restaurants, and beauty salon as being service-based business. Similarly said by Hung N. Bui (2004)7 service is an activity that impacts all parts of our life. Since we were born, our lives have relied on services (such as hospital service, education service, retail service etc.). In addition to that, nowadays a wide range of products heavily rely on its services to acquire competitive advantages. For instance, a TV buyer is now buying not only tangible components of a TV set but also other service benefits like free delivery and installation, 24 hour technical support etc. Another definition of service is that a service is any activity or benefit that one party offers to another which is essentially intangible and does not result in the ownership of anything. Its product may or may not be tied to a physical product (Kotler, Armstrong,


Saunders and Wong 19998). These modern marketers view services as a business that produces no tangible product. 2.3 Service quality Service quality was defined differently through the view of many researchers. For example: Bitner, Booms and Mohr (1994)9 defined service quality as ‘the consumer’s overall impression of the relative inferiority / superiority of the organization and its services’. Therefore, service quality is key of survival to all servicing companies. Cronin and Taylor (1994)10 viewed service quality as a form of attitude representing a long-run overall evaluation. Maintaining service quality at certain level and improving service quality must be life-time efforts to those companies who desire life-time prosperity in customers’ heart. Parasuraman, Zeithaml and Berry (1985)11 defined service quality as ‘a function of the differences between expectation and performance along the quality dimensions’. Likewise, Roest and Pieters’ (1997)12 held the same definition that service quality is a relativistic and cognitive discrepancy between experience-based norms and performances concerning service benefits. 2.4 Customer satisfaction Definitions of customer satisfaction have been widely discussed from the view of many researchers and organizations who increasingly desire to measure it. A group of researchers of the Center for the Study of Social Policy (2007) 13 conceptualize that satisfaction is based on the customer’s experience of both contact with the organization (the moment of truth) and personal outcomes. According to these researchers, satisfaction can be experienced in a variety of situations and connected to both goods and services. To another extent, these researchers defined satisfactions as a “highly personal assessment” that is greatly influenced by “individual expectations”. This definition views “individual” element as powerful force to create satisfaction. Likewise, many researchers (Oliver, 1981; Brady and Robertson, 200114) conceptualize customer satisfaction as an individual’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.15


Whereas, Boulding et al., (1993)16 and Yi and La (2004)17 conclude satisfaction into two general conceptualizations: transaction-specific satisfaction and cumulative satisfaction. Transaction-specific satisfaction is a customer’s evaluation of his or her experience and reactions to a particular service encounter (Cronin and Taylor, 1992; Boshoff and Gray, 2004). Cumulative satisfaction refers to the customer’s overall evaluation of the consumption experience to date (Jones and Suh 2000) 18. Because customer satisfaction is highly variable assessment individuals do based on their experiences with specific features of products and services they receive, it makes sense for servicing organizations to involve customer satisfaction measurement as their meaningful benchmark for development. 2.5 Link between service quality and customer satisfaction Many researches have realized the interrelated values of service quality and customer satisfaction. Corrin and Taylor (1992)19 consider that service quality and customer satisfaction “share a close relationship”. Service quality is the key to measure user satisfaction (Pitt et al., 1995)20. Taylor and Baker (1994) and Rust and Olivier (1994) identified several factors that precede customer satisfaction. They argued that there are 5 antecedents that contribute to satisfaction: clear understanding of customer needs and expectations, perceived value, service quality, internal satisfaction and complaint management. This research showed that Service quality is one major attribute of satisfaction. It is said by Olivier (1993) that service quality is a casual antecedent of customer satisfaction, due to the fact that service quality is viewed at transactional level and satisfaction is viewed as an attitude. Dabholkar et al. (1996)21 reported that the service quality divisions are related to overall service quality and or customer satisfaction. Fornell et al., (1996)22 expressed that satisfaction is a consequence of service quality. To another extent, other researches suggested that in service field service quality and customer satisfaction (also called the “construct”) are separate but distinct constructs. (Boulding et. al., 1993)23. They argued that service quality has specific dimensions judgments while customer satisfaction can be resulted from any dimension, whether or not it is quality related. They report that expectations for quality are based on ideals or


perceptions of excellence, whereas customer satisfaction assessment comprise by nonquality issue such as needs, equity, perceptions of fairness etc., From the review of literature it can be inferred that performance of service delivery can result in level of customer satisfaction. 3. Theoretical Framework 3.1 3.1.1 Instruments to measure Service Quality SERVQUAL model The service sector is expanding at an increasing rate and is becoming intensely competitive (Chen, Gupta and Rom, 199424). As such, service quality becomes pivotal across all business units of an organization. Corporate now pay appropriate attention to continuously revisit their service quality system in order to improve approaches their organizations using to serve customers. However, defining and measuring quality in services might be difficult due to intangible nature of service offering. SERVQUAL model developed by extensive research by Parasuraman et. al. (1985, 1988 and 1991) has been carried out widely to measure service quality in many sectors. Early research done by Parasuraman et al. realized that determinants of Perceived service quality comprise of 02 elements of expected service and perceived service. This discrepancy is illustrated by Service Quality Gap. This gap is displayed in A “Gaps” Model in Service Quality as follows: • Gap 1: This gap appears when there is discrepancy between Customer Expectations and Management Perceptions of Customer Expectations. Reasons creating this gap are because the servicing organizations don’t have sufficient marketing research, or there is inadequate use of marketing research, lack of interaction between management and customers, or there is insufficient communication between contact employees and managers. • Gap 2: appears when there is discrepancy between Management Perceptions of Customer Expectations and Service Quality Specifications. This gap exists when the company management is not committed to service quality. Or even when they are committed, but they lack of formal process to set up the service quality goals, and there is inadequate standardization of tasks to implement the promises. It also happens the managers don’t have


the perception of infeasibility to the areas that customer expectations can’t be met. • Gap 3: occurs when there is differentiation between Service Quality Specifications and Service Delivery. This gap might be originally caused by lack of team work, poor employees, poor technology, lack of appropriate compensation system, role conflict among contact employees or role ambiguity among contact employees. • Gap 4: happens when there is discrepancy between Service Delivery and External Communications to Customers. If a Sales person fails to communicate with customers the service quality properly, it may cause to create the gap. Poor advertising of the organization service quality also fail ways of customers approach. Big organizations are likely to commit this mistake if there are differences between polices and procedures across the branches and departments. • Gap 5: exists when there is distinction between Customers’ Service Expectations and Customers’ Service Expectations. Parasuraman used this gap to measure service quality in his approach. Initially in their research, Parasuraman et.al. (1985) established a model based on dimensions of service quality that customers use to assess the service. There are 10 potentially overlapping dimensions: tangibles, reliabilities, responsiveness, communication, creditability, Security, competence, courtesy, understanding/knowing the customer and access.25 • Tangibles: include the physical evidence of the service: physical facilities, appearance of personnel, tools or equipment used to provide the service, physical presentations of the service such as plastic ATM cards or bank statements. • Reliabilities: involve consistency of performance dependability. It means that the firm performs the service right the first time. It also means that the firm honors its promises. Especially it involves first call resolution, and following up ATM card delivery on designated time to customers.


Responsiveness: concerns the willingness or readiness of employees to provide service. It involves timeliness of service: emailing forms of registration to customers immediately, calling the customer back quickly, or giving prompt service (cooperating with other personnel quickly to solve customers problems)

Communication: means keeping customers informed in language they can understand and listen to them. It may mean that the company has to adjust its language for different consumers – increasing the level of sophistication with a well-educated customer and speaking and plainly with a novice. It involves speaking English with foreign customers, explaining the service correctly and assuring the consumers that problem will be handled right away by authorized persons.

Creditability: involves trustworthiness, believability, and honesty. It involves having the customer’s best interests at heart. Contributing to credibility includes company name, reputation, and personal characteristic of contact agents.

Security: is the freedom from danger, risk or doubt. It involves physical safety while doing transaction at ATM, or financial security (Can I trace where my credit card was used) and confidentiality ( Are my dealings with the bank private?)

Competence: means possession of the required skills and knowledge to perform the service. It involves knowledge and skill of the agents, and research capabilities of the organization.

• •

Courtesy: involves politeness, respect, consideration, and friendliness of agents, their sweet voices and helpful attitudes. Understanding/knowing the customer: involves making the efforts to understand the customer’s needs. It involves: learning the customer’s specific requirements, providing individualized attention ( say customer name while communicating) or recognizing the regular customers

Access: involves approachability and ease of contact. It means: the service is easily accessible by telephone (lines are not busy and they do not put you


on hold), waiting time to receive service, convenient hours of operation, convenient location of service facility (location of bank branches, or ATM) This model was applicable to any servicing organization in any industry. There were intensive debate regarding this model, as noted by Babakus and Boller (1992)26, there is a need to develop industry-specific measures of service quality. This is particularly important from a managerial perspective (Shemwell and Yavas, 1999)27. Because many of the questions in existing instruments (notably SERVQUAL batteries) intended to be applied across situations/services just do not apply in a specific context and force researchers to drastically alter the items (Babakus and Boller, 1992; Babakus and Mangold, 1992; Carman, 1990; McAlexander et al., 1994). Thus, instead of taking an existing instrument and trying to fit it to the context, a better approach is to develop an instrument specifically for the focal service. (Parasuraman et. al., 1988, 1990). Afterwards, the 10 dimensions were reduced to five by: • • • • • Tangibles: Appearance of physical facilities, equipment, personnel, and communication materials. Reliability: Ability to perform the promised service dependably and accurately. Responsiveness: service. Assurance: Knowledge and courtesy of employees and their ability to inspire trust and confidence. Empathy: Caring, individualized attention the firm provides its customers. In a speech given at University of Miami (2004), Parasuraman revised the SERVQUAL model items into 21- item scale that are covered in 5 dimensions that customers can receive from specific servicing company. Reliability: 1. Providing service as promised 2. Dependability in handling customers’ service problems 3. Performing services right the first time 4. Providing service at promised time 5. Keeping customers informed about when services will be performed Willingness to help customers and provide prompt


Responsiveness 6. Prompt service to customers 7. Willingness to help customers 8. Readiness to respond to customers’ request Assurance 9. Employees who instill confidence in customers 10. Making customers feel safe in their transactions 11. Employees who are consistently courteous 12. Employees who have the knowledge to answer customer questions Empathy 13. Giving customer individual attention 14. Employees who deal with customers in a caring fashion 15. Having the customers’ best interest at heart 16. Employees who understand the needs of their customers Tangibles 17. Modern equipment 18. Visually appealing facilities 19. Employees who have a neat, professional appearance 20. Visually appealing materials associated with the service 21. convenient business hours This 21 item-scale then will be adjusted according to the nature of call center of the banking industry to build research measurement scales in later chapter. 3.2 Empirical studies Many empirical studies have been conducted to test SERVQUAL model in specific industries. In the banking industry, there were many researches done by Yavas et. al. (1997)28, Bahia and Nantel 2000; Lassar et. al., 2000; Duncan and Elliott, 2002; Jabnoun and Al-Tamimi, 2002; and Arasli et. al., 2005. In the call center industry the empirical research for SERVQUAL model appears to be scarce. Warren et.al. (2002)29 conducted a research to assess a case call center using SERVQUAL model. They found that as a customer never comes into contact with the


physical appearance of a call center, the area covered by the tangibles criteria does not apply. Via the telephone, the only dimension of “tangible” contact is customer service representative’s (CSR) voice, which is extremely important in any encounter with a customer through telephone. It is not possible for the customer to evaluate the service level but the customer has to interact with other criteria. Responsiveness, reliability, assurance and empathy are all transmitted by CSR’s voice and are dependent on CSR’s communication skills. In another research, Upal M. (2008)30 applied SERVQUAL approach in evaluating customer satisfaction in telecommunication industry in Bangladesh. The traditional SERVQUAL five dimension model was adjusted into four dimension model. These dimensions are responsiveness, assurance, communication and discipline. The research showed that call center agents are vital to the success of any call center. Satisfied employees reinforce customer satisfaction, which in turn reinforced employee satisfaction. In addition to that, customers’ education in the service delivery process contributes to their satisfaction. Managerial orientation also is one of the major forces that drive customer satisfaction. This research is hoped to be the platform for discussing the issues on the service quality and customer satisfaction in the call center industry in Vietnam. 4. Author’s research model and research hypothesis 4.2.1 Author’s research model From the literature review of previous researches about interrelationship between service quality and customer satisfaction using SERVQUAL model, it seems that SERVQUAL approach is the most common method for measuring service quality. The current research designed a conceptual framework for measuring the service quality of the Reliability call center in ABBANK also using SERVQUAL model as follows: H1 Responsiveness H2 Assurance H3 H4 Empathy H5 Customer satisfaction

Tangibles Author’s research model


The model comprises of 5 independent components: • • • • • Reliability describes the ability to answer questions to customers dependably and accurately. Responsiveness describes the willingness to help customers and provide prompt answers and helps at first-call attempt. Assurance describes the knowledge and courtesy of agents and their ability to inspire trust and confidence to customers through telephone. Empathy describes caring fashion, individualized attention call center agents provide customers. Tangible describes the appearance of telecommunication tools, operation hours, and call center physical present in their advertisement. And there is one dependent variable: • 4.2.2 Customer satisfaction describes the level of satisfaction that customer is experiencing with the services delivered by Call Center. Research hypothesis Hypothesis must be formulated in order to evaluate the level of satisfaction of the service provided by call center using above quality dimensions. It is noteworthy that these dimensions are interrelated and affect significantly on customer satisfaction. • H1: There is a positive impact of reliability on customer satisfaction, which means that the more reliable customers feel about call center services, the more they are satisfied. • H2: There is a positive impact of responsiveness on customer satisfaction, which means that the more responsive the call center is, the more satisfied customers feel. • H3: There is a positive impact of assurance on customer satisfaction, which means that customers are satisfied about call center when they are assured about the services they receive. • H4: There is a positive impact of empathy on customer satisfaction, which means that the more empathetic customers feel when interacting with the call center, the more they are satisfied.


• H5: There is a positive impact of tangible dimension on customer satisfaction, which means that the more visual customers feel about the call center, the more they are satisfied. 5. 5.1 Name: Introduction to An Binh Bank & Call Center General view of An Binh Commercial Joint Stock Bank AN BINH COMMERCIAL JOINT STOCK BANK

Head Office: 170 Hai Ba Trung Street, Ward Da Kao, Dist 1, HCMC An Binh Bank (ABBANK) is one of the leading commercial joint-stock banks and among top ten largest commercial banks in terms of charter capital in Vietnam. After 15 years of development since its establishment in 1993, ABBANK has made major breakthrough over the last 3 years. ABBANK’s current charter capital exceeds VND 2,700 billion and its national network of nearly 70 branches and sub-branches covers 20 cities and provinces as of 2008. Through its distribution channel, ABBANK provided products and services to thousand of corporate and ten thousands of consumers. Over the past 2 years, ABBANK’s total assets, incomes and profit kept growing more than 300%. ABBANK currently aims at 3 categories of customers: corporate, individuals and investors: Corporate banking: ABBANK provides corporate with all-in financial-banking products and services such as loans, factoring, guarantee services, import/export financing, account services, trade services… Consumer banking: ABBANK provides individuals with fast and complete credit products as well as flexible savings products: - Installment loan for house/land purchase or house renovation; - Installment loan for house/land purchase with tenor up to 30 years - Life insurance for consumer;


- Installment loan for car purchase; unsecured loan for consumption; - Installment loan for manufacturing; working capital financing; flexible secured loan for consumption; - YOUsaving products: interest rate based on actual deposit days, escalating savings,… and payment services, internal and external remittance… Investor banking: ABBANK provides individual and corporate investors with authorized services as well as investment consultancy. ABBANK particularly provides corporate investors with services such as financial consulting, consulting and guarantee on bond issuance, acting as agent of bond issue. ABBANK’s competitive features are recognized by the provision of flexible, effective and safe financial solutions with friendly service; focus on customers’ needs and satisfaction in the development of any business models and organizational structure; ensuring of excellent and consistent service delivery based on standard technology and process as well as skilled staffs. 5.2 Introduction to ABBANK call center In March 2008, the call center of ABBANK was established with the purpose to maintain and develop customer care service. According to the decision 225/QD-HDQT-07, call center was set up in March of 2008 with the following objectives: - Consulting about banking products and banking services of BA BANK to clients through telephone, email, fax… - Responding and handling directly information requested by customers or transferring to authorised departments. - Responding and handling directly payment transaction and services or transferring to authorized departments - Implementing telemarketing about banking products and services to individual clients. Call center performance statistics from Mar 2008-Jun 2009



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